What's New? Federal Regulatory Changes Incoming

Federal regulators are driving significant shifts to tailor and modernize supervision, focusing on reducing regulatory burden for community banks by adjusting examination frequency and scope based on risk, and concentrating oversight specifically on material financial risks. In a major joint effort, the OCC and FDIC proposed rules to codify the elimination of reputation risk from their supervisory programs, prohibiting adverse actions against institutions solely based on customers' political, religious views, or lawful but politically disfavored business activities. To enhance regulatory clarity, five agencies—the OCC, FinCEN, Federal Reserve Board, FDIC, and NCUA—issued joint FAQs regarding Suspicious Activity Reports (SAR) and Bank Secrecy Act reporting; separately, the Federal Reserve released guidance and templates to clarify capital instruments for mutual banking organizations, building on a recent OCC authorization for an innovative mutual capital certificate. Finally, the Federal Reserve plans operational expansion for the Fedwire Funds Service and National Settlement Service to include Sundays and weekday holidays, though implementation is scheduled for 2028 or later.

Stay tuned as developments are finalized!